EX-10.30 19 exhibit10-30.htm PURCHASE AGREEMENT exhibit10-30.htm Exhibit 10.30 $800,000,000 PLY GEM INDUSTRIES, INC. 8.250% Senior Secured Notes due 2018 PURCHASE AGREEMENT February 9, 2011 Credit Suisse Securities (USA) LLC As Representative of the Several Initial Purchasers c/o Credit Suisse Securities (USA) LLC Eleven Madison New York, New York 10010-3629 Dear Ladies and Gentlemen: 1. Introductory. Ply Gem Industries, Inc., a Delaware corporation (the “ Issuer ”) proposes, subject to the terms and conditions stated herein, to issue and sell to the several purchasers named in Schedule A hereto (the “ Initial Purchasers ”) U.S. $800,000,000 principal amount of its 8.250% Senior Secured Notes due 2018 (the “ Offered Securities ”) to be issued under an indenture (the “ Indenture ”) to be dated as of the Closing Date (as defined herein), among the Issuer, the Subsidiary Guarantors (as defined herein), Ply Gem Holdings, Inc. (“ Holdings ”) and Wells Fargo Bank, N.A., as trustee (the “ Trustee ”). The Offered Securities will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “ Securities Act ”). The Offered Securities will be unconditionally guaranteed (the “ Guarantees ”) on a senior secured basis by Holdings and the Issuer’s subsidiaries listed as such on Schedule B hereto (the “ Subsidiary Guarantors ” and, together with Holdings, the “ Guarantors ”). The Issuer, the Guarantors, the Trustee and the collateral agent (in such capacity, the “ Notes Collateral Agent ”), will enter into a collateral agreement (the “ Collateral Agreement ”) granting a security interest in the Collateral for the benefit of the Secured Parties (each capitalized term as defined below). The Offered Securities and the Guarantees will be secured (i) on a first-priority lien basis (subject to certain exceptions and permitted liens) on substantially all the tangible and intangible assets of the Issuer and the Guarantors (other than accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper and proceeds of the foregoing and certain assets such as contract rights, instruments and documents related thereto in each case held by the Issuer and the Guarantors (the “ Bank Collateral ”)), including the capital stock of the Issuer and of any subsidiary held by the Issuer or any Guarantor (which, in the case of any first-tier foreign subsidiary, will be limited to 66% of the voting stock and 100% of the non-voting stock of such first-tier foreign subsidiary) (the “ Notes Collateral ” and, together with the Bank Collateral, the “ Collateral ”) and (ii) on a second-priority lien basis by the Bank Collateral. The Collateral will be more fully described in the Intercreditor Agreement to be dated as of the Closing Date, among the Issuer, the Guarantors, the Bank Collateral Agent (as defined therein), the Trustee and the Notes Collateral Agent (the “ Intercreditor Agreement ”), the Collateral Agreement (the Collateral Agreement together with the Intercreditor Agreement, the Mortgages (as defined below), the Security Documents (as defined below), the Copyright, Patent, and Trademark Agreements (as defined in the Collateral Agreement) and each of the other documents executed and delivered securing the whole or any part of the Issuer’s and Guarantors’ obligations under the Indenture or confirming the existence of the security interests granted for the benefit of the Secured Parties (all such documents are collectively referred to herein as the “ Security Documents ”), each to be delivered to the Notes Collateral Agent, granting a security interest in the Collateral subject only to Permitted Liens (as defined in the Indenture) (collectively, the “ Secured Parties ”). For purposes of this Agreement, the term “Mortgage” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage, land charge or other security document granting a lien or encumbrance on any mortgaged property to secure the Obligations (as defined in the Collateral Agreement) of the Issuer and the Guarantors, as applicable. As of the date hereof, $725.0 million in aggregate principal amount of the Issuer’s 11.75% senior secured notes due 2013 (the “ 11.75% Notes ”) are outstanding. On January 28, 2011, the Issuer commenced a tender offer for any and all outstanding 11.75% Notes (the “ Tender Offer ”) as described in the Offer to Purchase dated January 28, 2011 (the “ Offer to Purchase ”). The Issuer intends to purchase on the Early Settlement Date (as defined in the Offer to Purchase) all of the 11.75% Notes are properly tendered on or prior to the Early Tender Date (as defined in the Offer to Purchase). If less than all of the 11.75% Notes properly tendered on or prior to the Early Tender Date, the Issuer intends to cause the trustee of the 11.75% Notes to issue a redemption notice for such 11.75% Notes on the Closing Date and, in such an event, will irrevocably deposit on the Closing Date with the trustee of the 11.75% Notes an amount sufficient to redeem such 11.75% Notes to effect the satisfaction and discharge of its obligations under the 11.75% Notes. The Issuer intends to purchase all of the 11.75% Notes tendered after the Early Tender Date, but on or prior to the Expiration Date, on the Final Settlement Date (each such capitalized term as defined in the Offer to Purchase). If less than all of the 11.75% Notes are tendered in the Tender Offer, the Issuer intends to redeem (the “ Redemption ”) (i) up to $70,000,000 of the 11.75% Notes on the date that is 30 days after the Closing Date (the “ First Redemption Date ”) and (ii) any 11.75% Notes that remain outstanding after the First Redemption Date on April 1, 2011 (the “ Final Redemption Date ”). The Issuer intends to use the net proceeds from the Offered Securities to pay (i) the purchase price of any 11.75% Notes purchased in the Tender Offer, (ii) the redemption prices of any 11.75% Notes redeemed by the Issuer and (iii) costs related to the Transactions. The Initial Purchasers have advised the Issuer that the Initial Purchasers intend, as soon as they deem practicable after this Purchase Agreement (this “ Agreement ”) has been executed and delivered, to resell (the “ Exempt Resales ”) the Offered Securities in private sales exempt from registration under the Act on the terms set forth in the Preliminary Offering Memorandum (as defined below) and Final Offering Memorandum (as defined below), as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be “qualified institutional buyers” (“ QIBs ”), as defined in Rule 144A under the Act (“ Rule 144A ”), in accordance with Rule 144A and (ii) other eligible purchasers pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Act (“ Regulation S ”) in accordance with Regulation S (the persons specified in clauses (i) and (ii), the “ Eligible Purchasers ”). Holders (including subsequent transferees) of the Offered Securities will have the registration rights set forth in the registration rights agreement (the “ Registration Rights Agreement ”), among the Issuer, the Guarantors and the Initial Purchasers, to be dated the Closing Date (as defined herein), substantially in the form attached hereto as Exhibit E , for so long as such Offered Securities constitute “ Transfer Restricted Securities ” (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer and the Guarantors will agree to (i) file with the Securities and Exchange Commission (the “ Commission ”) under the circumstances set forth therein, (a) a registration statement under the Securities Act (the “ Exchange Offer Registration Statement ”) relating to the Offered Securities in a like aggregate principal amount as the Issuer issued under the Indenture, identical in all material respects to the Offered Securities and registered under the Securities Act (the “ Exchange Securities ”), to be offered in exchange for the Offered Securities (such offer to exchange being referred to as the “ Exchange Offer ”) and (b) if necessary under the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Securities Act (the “ Shelf Registration Statement ” and, together with the Exchange Offer Registration Statement, the “ Registration Statements ”) relating to the resale by certain holders of the Offered Securities, (ii) to use its commercially reasonable efforts to cause such Registration Statements to be declared effective and cause such Registration Statements to remain effective and usable for the periods specified in the Registration Rights Agreement and (iii) to use its commercially reasonable efforts to consummate the Exchange Offer. The Offered Securities and the Exchange Securities are referred to collectively as the “ Securities .” This Agreement, the Guarantees, the Offered Securities, the Indenture and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the “ Operative Documents .” The issuance and sale of the Offered Securities, the issuance of the Guarantees, the Tender Offer and the use of proceeds from the sale of the Offered Securities described in the General Disclosure Package (as defined herein) and Final Offering Memorandum and the Redemption, are collectively referred to as the “ Transactions .” The Issuer and each of the Guarantors hereby agree with the several Initial Purchasers as follows: 2. Representations and Warranties of the Issuer, Holdings and the Subsidiary Guarantors. The Issuer and each of the Guarantors jointly and severally represent and warrant to, and agree with, the several Initial Purchasers that: (a) A preliminary offering memorandum (including the documents incorporated by reference therein, the “ Preliminary Offering Memorandum ”) relating to the Offered Securities to be offered by the Initial Purchasers and a final offering memorandum (including the documents incorporated by reference therein, the “ Final Offering Memorandum ”) disclosing the offering price and other final terms of the Offered Securities and dated as of the date of this Agreement (even if finalized and issued subsequent to the date of this Agreement) has been or will be prepared by the Issuer. “ General Disclosure Package ” means the Preliminary Offering Memorandum, together with any Issuer Free Writing Communication (as hereinafter defined) existing at the Applicable Time (as hereinafter defined) (other than the Supplemental Marketing Material (as hereinafter defined)) and the other information, if any, distributed at or prior to the Applicable Time to prospective investors of the Offered Securities, as evidenced by its being specified in Schedule C to this Agreement (including the term sheet listing the final terms of the Offered Securities and their offering, included in Schedule C to this Agreement, which is referred to as the “ Terms Communication ”). “ Applicable Time ” means 2:00 p.m. (New York City time) on the date of this Agreement. As of the date of this Agreement and as of the Closing Date, the Final Offering Memorandum does not and will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. At the Applicable Time and as of the Closing Date neither (i) the General Disclosure Package, nor (ii) any individual Supplemental Marketing Material, when considered together with the General Disclosure Package, included or will include any untrue statement of a material fact or omitted or will omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The preceding two sentences do not apply to statements in or omissions from the Preliminary Offering Memorandum or Final Offering Memorandum, the General Disclosure Package or any Supplemental Marketing Material based upon written information furnished to the Issuer by any Initial Purchaser through the Representative specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof. Subject to the foregoing paragraph, any references herein to the terms “ amend ,” “ amendment ” or “ supplement ” with respect to the Preliminary Offering Memorandum or Final Offering Memorandum shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise filed with the Commission, subsequent to the date hereof that is incorporated by reference therein; and all references in this Agreement to financial statements and schedules and other information which are “ contained ,” “ included ,” “ stated ,” “ set forth ” or “ described ” in the Preliminary Offering Memorandum or Final Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are included in any document filed under the Act or the Exchange Act, as applicable, and incorporated by reference in the Preliminary Offering Memorandum or Final Offering Memorandum. 2 “ Free Writing Communication ” means a written communication (as such term is defined in Rule 405 under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Offered Securities and is made by means other than the Preliminary Offering Memorandum or the Final Offering Memorandum. “ Issuer Free Writing Communication ” means a Free Writing Communication prepared by or on behalf of the Issuer, used or referred to by the Issuer or containing a description of the final terms of the Offered Securities or of their offering, in the form retained in the Issuer’s records. “ Supplemental Marketing Material ” means any Issuer Free Writing Communication other than any Issuer Free Writing Communication specified in Schedule C to this Agreement, and which is specified in Schedule D to this Agreement. (b) As of October 2, 2010, the Issuer had the capitalization as set forth under the heading “Capitalization” under the column “Actual” in the Preliminary Offering Memorandum. On the Closing Date, all of the issued and outstanding equity interests of the Issuer will have been duly authorized and validly issued, fully paid and nonassessable and not have been issued in violation of any preemptive or similar right and will be owned by Holdings free and clear of all liens (other than transfer restrictions imposed by the Securities Act, the securities or Blue Sky laws of certain jurisdictions and security interests granted pursuant to the documents governing the ABL Facility (as defined in the Preliminary Offering Memorandum) and the Security Documents). Attached as Schedule E is a true and complete list of each entity in which the Issuer has a direct or indirect majority equity or voting interest (each a “ Subsidiary ” and, together, the “ Subsidiaries ”), their jurisdictions of formation or organization, names of their equityholder(s) and percentage held by each equityholder. All of the issued and outstanding equity interests of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, were not issued in violation of any preemptive or similar right and, except as set forth in the General Disclosure Package, are owned, directly or indirectly through Subsidiaries, by the Issuer free and clear of all liens (other than transfer restrictions imposed by the Securities Act, the securities or Blue Sky laws of certain jurisdictions and security interests granted pursuant to the documents governing the ABL Facility (as defined in the Preliminary Offering Memorandum) and the Security Documents). Except as set forth in the General Disclosure Package, there are no outstanding options, warrants or other rights to acquire or purchase, or instruments convertible into or exchangeable for, any equity interests of the Issuer or any of the Subsidiaries. No holder of any securities of the Issuer or any of the Subsidiaries is entitled to have such securities (other than the Securities) registered under any registration statement contemplated by the Registration Rights Agreement. (c) The Issuer and each Guarantor (i) is a corporation, limited liability company, partnership or other entity duly incorporated or organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization; (ii) has all requisite corporate or other power and authority necessary to own its property and carry on its business as now being conducted, and (iii) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it or its ownership of property makes such qualification necessary, except where the failure to be so qualified and be in good standing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. A “ Material Adverse Effect ” means (i) a material adverse effect on the business, condition (financial or otherwise), results of operations, assets or liabilities of the Issuer and the Subsidiaries, taken as a whole or (ii) a material adverse effect on the ability to consummate the Transactions on a timely basis. (d) The Issuer and each of the Guarantors have all requisite corporate or other power and authority to execute, deliver and perform all of their obligations under the Operative Documents to which each is a party and to consummate the transactions contemplated thereby, and, without limitation, the Issuer has all requisite corporate power and authority to issue, sell and deliver and perform its obligations under the Offered Securities. (e) The Indenture has been duly and validly authorized by the Issuer and the Guarantors and, when duly executed and delivered by the Issuer and the Guarantors (assuming the due authorization, execution and delivery thereof by the Trustee), will constitute a legally binding and valid obligation of the Issuer and each Guarantor, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity and the discretion of the court before which any proceeding therefor may be brought (the “ Bankruptcy Exceptions ”). The Indenture, when executed and delivered, will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Memorandum. (f) The Offered Securities have been duly and validly authorized for issuance and sale to the Initial Purchasers by the Issuer. When the Offered Securities are issued by the Issuer, authenticated by the Trustee and delivered by the Issuer against payment therefor by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, the Offered Securities will be legally binding and valid obligations of the Issuer, entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions. The Offered Securities, when issued, authenticated and delivered, will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Memorandum. The Exchange Securities have been, or on or before the Closing Date will be, duly and validly authorized for issuance by the Issuer, and when issued by the Issuer, authenticated by the Trustee and delivered by the Issuer in accordance with the terms of the Exchange Offer, the Registration Rights Agreement and the Indenture, the Exchange Securities will be legally binding and valid obligations of the Issuer, entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions. (g) The Guarantees have been duly and validly authorized by each of the Guarantors and, when the Offered Securities are issued by the Issuer, authenticated by the Trustee and delivered by the Issuer against payment by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except that enforceability thereof may be limited by the Bankruptcy Exceptions, and the Guarantees will conform in all material respects to the description thereof in the General Disclosure Package and the Final Offering Memorandum. The guarantees of the Exchange Securities have been, or on or before the Closing Date will be, duly and validly authorized by each of the Guarantors and, when the Exchange Securities are issued by the Issuer, authenticated by the Trustee and delivered in accordance with the terms of the Exchange Offer and the Indenture, will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except that enforceability thereof may be limited by the Bankruptcy Exceptions. 3 (h) Except as disclosed in the General Disclosure Package, there are no contracts, agreements or understandings between the Issuer or Holdings and any person granting such person the right to require Holdings or the Issuer to file a registration statement under the Securities Act with respect to any securities of the Issuer or to require the Issuer to include such securities with the Securities registered pursuant to any Registration Statement. (i) On the Closing Date, the Indenture will conform in all material respects to the requirements of the United States Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (j) Except as described in the section entitled “Plan of Distribution” in the General Disclosure Package, there are no contracts, agreements or understandings between the Issuer, Holdings or any other person other than the Initial Purchasers that would give rise to a valid claim against the Issuer, any Guarantor or any of the Initial Purchasers for a brokerage commission, finder’s fee or like payment in connection with the issuance, purchase and sale of the Securities. (k) Except as set forth in the General Disclosure Package and assuming the accuracy of, and compliance with, the representations, warranties and agreements of the Initial Purchasers under Section 4 of this Agreement, no consent, approval, authorization or order of, or filing with, registration, qualification, license or permit of or with, any Governmental Authority (as hereinafter defined) (collectively, a “ Consent ”) is required for the consummation of the transactions contemplated by this Agreement and the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities by the Issuer or the issuance of the Guarantees by the Guarantors except (i) for the order (and filings to obtain such order) of the Commission declaring the Exchange Offer Registration Statement or the Shelf Registration Statement effective, (ii) as may be required under the securities or Blue Sky laws of the various states and foreign jurisdictions, (iii) such Consents as have been or will be obtained or made on or prior to the Closing Date, (iv) such filings and recordings with Governmental Authorities as may be required to perfect liens under the Security Documents, (v) any Form 8-K required to be filed in connection with the Transactions and (vi) where the failure to obtain such Consents could not reasonably be expected to have a Material Adverse Effect. (l) Except as set forth in the General Disclosure Package, and assuming the accuracy of, and the Initial Purchasers’ compliance with, the representations, warranties and agreements of the Initial Purchasers set forth in Section 4 of this Agreement, and the compliance by the holders of the Securities with the offering and transfer restrictions set forth in the General Disclosure Package, the execution, delivery and performance of the Operative Documents and consummation of the Transactions do not and will not (i) violate the charter, bylaws or other constitutive documents of the Issuer or any Subsidiary of the Issuer or the Guarantors, (ii) constitute a breach of, or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), or require consent under, or result in a Repayment Event (as defined below), other than or a Repayment Event that will be satisfied at the Closing Date as contemplated by the General Disclosure Package, or the creation or imposition of a lien, charge or encumbrance on any property or assets of the Issuer or any Subsidiary (other than as created pursuant to the Indenture and the Security Documents) under any of the Agreements and Instruments (as defined below) or (iii) violate any law, statute, rule or regulation, including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System or any judgment, order or decree of any Governmental Authority, except for such violations, breaches, defaults, Repayment Events or liens that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 4 of this Agreement, no Consent is required to be obtained or made by the Issuer or any Subsidiary for the execution, delivery and performance by the Issuer or any Subsidiary of the Operative Documents and the consummation of the Transactions, except (A) such Consents as have been or will be obtained or made on or prior to the Closing Date, (B) registration of the Exchange Offer or resale of the Offered Securities under the Act pursuant to the Registration Rights Agreement, and qualification of the Indenture under the Trust Indenture Act, in connection with the issuance of the Exchange Securities, (C) such filings and recordings with Governmental Authorities as may be required to perfect liens under the Security Documents and (D) where the failure to obtain such consents, approvals, authorizations or orders, filings, registration, qualifications, licenses or permits could not reasonably be expected to have a Material Adverse Effect. No consents or waivers from any other person or entity are required for the execution, delivery and performance of the Operative Documents and the consummation of the Transactions, (1) other than such consents and waivers as have been obtained or will be obtained on or prior to the Closing Date and will be in full force and effect and (2) except where the failure to obtain such consents or waivers could not reasonably be expected to have a Material Adverse Effect. As used herein, a “ Repayment Event ” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Issuer or any Subsidiary. (m) This Agreement has been duly authorized, executed and delivered by the Issuer and the Guarantors. (n) The Issuer, Holdings and the Subsidiaries have good and marketable title to all items of owned real property and valid title to all personal property owned by each of them, in each case free and clear of any pledge, lien, encumbrance, security interest or other defect or claim of any third party, except (i) such as do not materially interfere with the use made or proposed to be made of such property by the Issuer, Holdings or such Subsidiary, (ii) as described in the General Disclosure Package, (iii) as created pursuant to the Security Documents or (iv) liens permitted by the Indenture and the Security Documents. Any real property, personal property and buildings held under lease by the Issuer, Holdings or any such Subsidiary are held under valid, subsisting and enforceable leases, with such exceptions as do not materially interfere with the use made or proposed to be made of such property and buildings by the Issuer or such Subsidiary. 4 (o) The Issuer, Holdings and the Subsidiaries have (i) all licenses, certificates, permits, authorizations, approvals, franchises and other rights from, and have made all declarations and filings with, all applicable Governmental Authorities and all self-regulatory authorities (each, an “ Authorization ”) necessary to engage in the business conducted by them in the manner described in the General Disclosure Package, except where the failure to hold such Authorizations could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) the Issuer, Holdings and the Subsidiaries have not received written notice from any Governmental Authority or self-regulatory authority threatening to limit, suspend or revoke any such Authorization, except where such limitation, suspension or revocation could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All such Authorizations are valid and in full force and effect, and the Issuer, Holdings and the Subsidiaries are in compliance in all material respects with the terms and conditions of all such Authorizations and with the rules and regulations of the authorities having jurisdiction with respect to such Authorizations, except for any invalidity, failure to be in full force and effect or noncompliance with any Authorization that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. (p) Except as could not reasonably be expected to have a Material Adverse Effect, no labor disturbance by the employees of the Issuer, Holdings or any Subsidiary exists or, to the knowledge of the Issuer or the Guarantors, is imminent. (q) The Issuer, Holdings and each Subsidiary owns, possesses or has the right to employ all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, the “ Intellectual Property Rights ”) necessary to conduct the businesses operated by it as described in the General Disclosure Package, except where the failure to own, possess or have the right to employ such Intellectual Property could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Neither the Issuer, nor Holdings nor any Subsidiary has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing that could reasonably be expected to have a Material Adverse Effect. The use of the Intellectual Property in connection with the business and operations of the Issuer, Holdings and the Subsidiaries does not infringe on the rights of any person, except for such infringement as could not reasonably be expected to have a Material Adverse Effect. (r) Except as disclosed in the General Disclosure Package or as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) the Issuer, Holdings and the Subsidiaries are in compliance with and not subject to any pending or threatened liability under applicable Environmental Laws (as defined below), (ii) the Issuer, Holdings and the Subsidiaries have made all filings and provided all notices required under any applicable Environmental Law, and have, and are in compliance with, all permits, licenses or other approvals required under any applicable Environmental Laws for their current operations and each of them is in full force and effect, (iii) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or threatened against the Issuer, Holdings or any Subsidiary under any Environmental Law, (iv) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Issuer or any Subsidiary, (v) neither the Issuer, nor Holdings nor any Subsidiary has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“ CERCLA ”), or any comparable state law and (vi) no property or facility of the Issuer or any Subsidiary is (A) listed or proposed for listing on the National Priorities List under CERCLA or (B) listed on the Comprehensive Environmental Response, Compensation and Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any Governmental Authority. No facts or circumstances exist and no event or condition is occurring or has occurred with respect to the Issuer, Holdings or any Subsidiary relating to any Environmental Law, any release of any hazardous, toxic or dangerous substance or waste, any chemical, any solid waste, any other pollutant or contaminant, or the Issuer’s, Holdings’ or any Subsidiary’s compliance with current requirements of Environmental Law, that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. For purposes of this Agreement, “ Environmental Laws ” means the common law and all applicable federal, state, local and foreign laws, regulations, rules, ordinances, codes, orders, decrees, judgments, injunctions or any other legally enforceable requirement issued, promulgated, approved or entered thereunder, relating to pollution, or to protection of public or employee health and safety from hazardous, toxic or dangerous substances or wastes or protection of the environment, including, without limitation, laws relating to: (i) emissions, discharges, releases or threatened releases of hazardous materials into the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport, arrangement for disposal or transport or handling of hazardous, toxic or dangerous substances or waste, any chemical, any solid waste, or any other pollutant or contaminant, and (iii) underground and aboveground storage tanks and related piping, and emissions, discharges, releases or threatened releases therefrom. (s) Except as set forth in the General Disclosure Package, there is no action, suit or proceeding before or by any Governmental Authority or arbitrator, now pending or, to the knowledge of the Issuer or the Guarantors, threatened, to which the Issuer, Holdings or any Subsidiary is or may be a party or to which the business, assets or property of the Issuer, Holdings or any Subsidiary is or may be subject that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. (t) All tax returns required to be filed by the Issuer, Holdings or any Subsidiary have been filed in all jurisdictions where such returns are required to be filed; and all taxes shown on such returns that are due or claimed to be due from such entities or that are due and payable have been paid, other than those being contested in good faith and for which adequate reserves have been provided to the extent required in accordance with generally accepted accounting principles in the United States (“ GAAP ”) or those currently payable without penalty or interest and except where the failure to make such required filings or payments could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 5 (u) Neither the Issuer, nor Holdings nor any Subsidiary has any liability for any prohibited transaction or accumulated funding deficiency (within the meaning of Section 412 of the Internal Revenue Code) or any complete or partial withdrawal liability with respect to any pension, profit sharing or other plan which is subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), to which the Issuer, Holdings or any Subsidiary makes or ever has made a contribution and in which any employee of the Issuer, Holdings or any Subsidiary is or has ever been a participant, except for such liability as could not reasonably be expected to have a Material Adverse Effect. With respect to such plans, the Issuer, Holdings and each Subsidiary is in compliance with all applicable provisions of ERISA, except for such non-compliance as could not reasonably be expected to have a Material Adverse Effect. (v) As of the date hereof and as of the Closing Date, immediately prior to and immediately following the consummation of the Transactions, the Issuer and each Guarantor is and will be Solvent. As used herein, “ Solvent ” shall mean, for any person on a particular date, that on such date (A) the fair value of the assets of such person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such person, (B) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such person on its debts as they become absolute and matured, (C) such person does not intend to, and does not believe that it will, incur debts and liabilities beyond such person’s ability to pay as such debts and liabilities mature, (D) such person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such person’s property would constitute an unreasonably small capital and (E) such person is able to pay its debts as they become due and payable. (w) The public accountants whose report is included in the General Disclosure Package and Final Offering Memorandum are independent with respect to the Issuer and Guarantors within the meaning of the Act and the rules of the Public Company Accounting Oversight Board. The historical financial statements (including the notes thereto) included in the General Disclosure Package and Final Offering Memorandum present fairly in all material respects the consolidated financial position, results of operations, cash flows and changes in stockholder’s equity of the entities to which they relate at the respective dates and for the respective periods indicated. All such financial statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods presented (except as disclosed therein) and in compliance with Regulation S-X (“ Regulation S-X ”) under the Exchange Act, except that the interim financial statements do not include full footnote disclosure. The historical financial information set forth under the captions “Offering Memorandum Summary — Summary Historical Financial Information” included in the General Disclosure Package and Final Offering Memorandum and the “Selected Historical Financial Information” incorporated therein by reference have been prepared on a basis consistent with that of the audited financial statements of Holdings. Since the date as of which information is given in th